Setting the Record Straight on a Biased Nuclear Report
In a report comparing the costs of nuclear energy and solar energy, New York Times reporter Diana Powers gives an unfair critique of nuclear power and glorifies solar energy by ignoring the challenges of bringing it online. Powers points to a study that says electricity produced from solar photovoltaic cells could be cheaper than nuclear and that nuclear’s costs are on the rise while solar’s costs are on the decline. The Times later amended the article to say, “In raising several questions about this issue and the economics of nuclear power, the article failed to point out, as it should have, that the study was prepared for an environmental advocacy group, which, according to its Web site, is committed to ‘tackling the accelerating crisis posed by climate change — along with the various risks of nuclear power.’”
Powers’ piece only briefly mentions economies of scale. Assigning all of the costs of the first few nuclear plants to future plants is inaccurate. As more orders are placed, economies of scale will be achieved. Today, it is very expensive to produce nuclear-qualified components and materials because steep overhead costs are carried by only a few products. Additional production will allow these costs to be spread, thus lowering costs overall. Because nuclear plants could have an operating life of 80 years, the benefit could be well worth the cost and it should be left to the nuclear industry to determine whether they take on those costs. Reducing the burdensome regulatory environment will also help truly realize the costs of nuclear power.
Solar does not enjoy such economies of scale nor is the true cost of solar explained in Powers’ article. Solar panels will be built in the most advantageous spots first and it will become increasingly difficult to build large-scale photovoltaic projects where sunlight is optimal. Moreover, solar panels (and windmills for that matter) must be built in remote locations and will require new transmission lines to transfer that electricity to urban areas. Even without those costs included, the Energy Information Administration (EIA) lists the levelized costs of various sources of electricity projected for 2016 (in 2008 dollars). Per megawatt hour, the levelized cost is $396.10 for photovoltaic solar power and $94.90 for nuclear energy.
Powers’ article admits that it is difficult to calculate the cost when factoring tax breaks and subsidies, but only attacks nuclear for the subsidies it receives. Solar and wind receive subsidies of over $23/Mwh compared with $1.59 for nuclear, $0.44/Mwh for conventional coal, and $0.25/Mwh for natural gas. This does not include the $27.2 billion allocated in the 2009 stimulus bill for energy efficiency and renewable energy research and investment. Energy subsidies reduce competition, inflate prices, and stifle technological innovation. And American’s have to pay twice for the subsidies. First through higher taxes and second with higher energy prices. The government should peel back energy subsidies altogether, not just the ones for nuclear energy.